Variable rate loans will vary in accordance with the rates in the marketplace based on the cash rates set by the Reserve Bank. Variable home loans are the most popular loans offered by lenders.
Variable loans can have repayment terms up to thirty years. The features and rates offered by different lenders depend on the amount you are borrowing, your credit score and some other factors.
Pro’s and Con’s of variable interest rate loans
- Flexibility: Variable loans allow you to make additional repayments, offer low introductory interest rates or redraw.
- Repayment Frequency: You have the option As this loan gives you the option of weekly, fortnightly or monthly repayment, you can maintain your budget accordingly.
- Loan redraw: This type of loan gives option of redrawing the additional amount you have made towards the repayment, in addition to the minimum repayment amount.
Rising rates: Your monthly repayments will automatically increase & you will need to monitor you affordability.